Japan's Nikkei rose for second week; Taiwan gained

Japan's Nikkei 225 Stock Average rose for a second week, led by Tokyo Electron Ltd and Ito-Yokado Co, after government reports on machinery orders and consumer sentiment fueled optimism the Japanese economy may recover.

"One can't avoid domestic-oriented companies, as there are signs of an economic pick-up within Japan," said Atsushi Osa, who helps manage the equivalent of US$110 billion in assets at Sumitomo Mitsui Asset Management Co. "The economy isn't likely to deteriorate going forward."

The Nikkei added 0.9 percent this week to 9635.35, gaining for the seventh week in eight. Takeda Chemical Industries Ltd, Japan's largest drugmaker, was among the biggest contributors to the advance after the US government recommended approval of Shionogi & Co's cholesterol-reducing drug Crestor.

The Topix index shed 0.3 percent to 945.78 this week as US reports on jobless claims and retail sales damped optimism that growth in the world's largest economy will accelerate in coming months. Some exporters such as Canon Inc declined.

Hong Kong's Hang Seng Index rose 2.9 percent to 9911.50, its biggest weekly gain in 10 weeks. Sun Hung Kai Properties Ltd, the city's biggest real estate company by sales, surged after a UBS Securities Asia Ltd analyst said in a research report that the stock remains the brokerage's "top pick" among developers.

In Taiwan, the TWSE index closed at 5239.96, for a week's gain of 1.7 percent. Hon Hai Precision Industry Co, the island's biggest electronics maker by sales, led the advance after saying it plans to sell as much as US$690 million of bonds convertible to shares to fund purchases of materials.

In the US, the Standard & Poor's 500 Index rose 1.3 percent and had its sixth weekly gain in seven. The Dow Jones Industrial Average added 0.5 percent and The NASDAQ Composite Index jumped 4.2 percent.

South Korea rallies

South Korea's Kospi gained 0.5 percent to 704.15, led by Samsung Electronics Co, the world's No. 2 semiconductor maker.

The company raised this year's sales forecast for flat-panel displays, chips and other goods made in China by almost a fifth after opening new factories to boost production.

Elsewhere in Asia, benchmarks in Thailand, Malaysia and New Zealand fell for the week, while those in Indonesia, Australia and Singapore gained.

A government report on Tuesday showed that machinery orders in Japan, an early indicator of business investment, unexpectedly increased 6.5 percent in May.

Tokyo Electron, the world's No. 2 maker of chip-production equipment, gained 6.2 percent to ¥6,640 this week. Advantest Corp, the world's biggest maker of equipment used to test memory chips, advanced 2.5 percent to ¥6,050.

Retailers gained on optimism consumer spending will increase.

Ito-Yokado, Japan's largest retailer, rose 3.6 percent to ¥3,430. Seven-Eleven Japan Co, the nation's No. 1 convenience store chain, added 0.6 percent to 3,320.

The government's monthly index which measures sentiment among taxi drivers, restaurant owners and other workers on the so-called front line of the economy, rose to 42.1 last month, up 3.7 points from May. The index improved for the first time in three months.

US economy

Concerns about the US economy dragged down some exporters.

First-time filings for jobless insurance rose in the week that ended yesterday, the US Department of Labor said in Washington.

Some US retailers such as Wal-Mart Stores Inc reported sales last year that missed forecasts as shoppers cut spending as unemployment rose, a Bank of Tokyo-Mitsubishi survey showed.

Canon fell 4.3 percent to ¥5,570. The maker of Eos cameras gets 70 percent of its revenue from overseas. Sony Corp, the maker of Vaio computers, declined 0.3 percent to ¥3,670.

Hong Kong's Sun Hung Kai Properties jumped 11 percent to HK$43 this week, its biggest weekly gain since December 2001. Paul Louie, an analyst at UBS Securities, said in a report that shares of the city's biggest real estate company by sales remains the brokerage's "top pick" among other developers.

UBS, which has a "buy" rating on the stock, said volume and prices of the property market are continuing to improve.

Taiwan

Taiwan's Hon Hai Precision advanced 15 percent to NT$146, ending the week at its highest since May 28. The company's shares surged after it announced plans to sell bonds convertible to shares to fund purchases of materials. Some of the proceeds will be used for working capital, Hon Hai said.

South Korea's Samsung Electronics, the world's second-largest maker of semiconductors, rose 2.6 percent this week to 394,000 won. The company expects combined domestic and export sales from its China plants of US$10 billion, 18 percent higher than its earlier forecast of US$8.5 billion, Han Chang Ho, Samsung's Beijing-based general manager, said in an interview.

Hynix Semiconductor Inc, the No. 3 global supplier of computer memory chips, surged 10 percent this week to 8,060 won.

Semiconductor-related shares were also lifted as the price of the most widely used computer-memory chips rose to a five-month high. The spot price of the benchmark 256-megabit, 266-megahertz double-data-rate dynamic random-access memory chip earlier this week climbed to its highest since Feb. 6, according to Dramexchange.com.

Week ahead

Investors will look at earnings at home and abroad to gauge whether gains in the region are sustainable.

Samsung Electronics announces earnings Wednesday. In the US, Microsoft Corp, the world's top software company, and top chipmaker Intel Corp will report results. International Business Machines Corp, the world's biggest seller of computer services, will also announce its earnings.

"Those companies can set the tone for the entire information-technology industry's outlook," said Jeon Woo Dong, who manages the equivalent of US$510 million at KB Investment Trust Management Co in Seoul.

"If they come out good, it could be a big boost for the markets. I'm optimistic," he said.